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Archived - Chapter 7:
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The Government is committed to restoring fiscal balance in Canada. This paper puts forward a new approach for more effective fiscal relations that will lead to a stronger Canada.
Budget 2006 outlines the immediate actions the Government is proposing to take.
Working to Strengthen the Federation—Budget 2006 Initiatives
Accountability through clarity in roles and responsibilities of orders of government
Fiscal responsibility and transparency in budget planning
Predictable long-term fiscal arrangements
Competitiveness and efficiency of the Canadian economic union
Effective collaborative management of the federation
The Government is committing to further action in the coming year after consultations with provinces and territories and broad discussions.
The Government intends to bring forward key proposals by fall 2006
The Government wants to foster a rich dialogue on how to move ahead and wants to ensure widespread participation in these discussions. To that end, the Government will seek input from a variety of sources. The Government will encourage Canadians to contribute to this important national debate by establishing a website where all interested stakeholders can make submissions and become better informed of progress on the Government’s actions. The Government will seek the views of academics and experts on the approach outlined in this paper at roundtable discussions that will be held over the summer. A key element in those discussions will be to ensure that governments have access to the revenues consistent with their responsibilities.
The Government will undertake extensive consultations with provinces and territories on the specific issues set out in this paper. It will also be essential to ensure that the perspectives and priorities of cities and communities are understood. The Minister of Finance will play a key role in these discussions. He will meet with his provincial and territorial counterparts as soon as possible to initiate discussions on fiscal arrangements issues, on proposals for the allocation of year-end surpluses, and on ways to strengthen the economic and social union and improve competitiveness, including:
- Examining the benefits of directing a portion of unplanned federal surpluses to the Canada Pension Plan/Quebec Pension Plan.
- How best to put Equalization and Territorial Formula Financing on a formula-based footing again.
- Determining the most appropriate arrangements for long-term funding commitments for post-secondary education and training.
- Moving forward to strengthen the economic union, including exploring ways to enhance tax harmonization and establish a common securities regulator.
Other consultations with provincial and territorial governments will also play an important role in moving ahead:
- The Minister of Intergovernmental Affairs will seek perspectives on the Government’s broad approach to the fiscal imbalance issue, including examining the merits of limiting the federal spending power in specific areas, and on ways to build a new, open relationship among governments.
- The Minister of Human Resources and Social Development will initiate discussions this spring with provinces and territories on the overall objectives for post-secondary education and training, appropriate roles, and on developing a framework for ensuring measurable results and accountability in respect of funding support.
- The Minister of Health will discuss with provinces and territories how the significant and increasing federal support for health care can best be used to support implementation of the 10–Year Plan to Strengthen Health Care, including improved reporting and the Patient Wait Times Guarantee.
- The Minister of Transport, Infrastructure and Communities will discuss the federal role in infrastructure with a view to putting federal funding on a predictable, long-term track and to ensuring accountability to Canadians for infrastructure investments by all governments.
- The Minister of Finance will consult with the Federation of Canadian Municipalities before the development of the federal budget to ensure that the perspectives and priorities of cities and towns are understood and reflected.
Parliament will be an important participant in this national dialogue. The Government will look to parliamentarians to provide guidance on measures to address the concerns about fiscal imbalance in Canada.
All of these consultations will help lay the groundwork for productive discussions among First Ministers in the fall of 2006 to consider the broad range of issues identified in this paper.
Budget 2007 would bring forward funding and legislation required to implement the Government’s proposals.
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